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ASHEVILLE, N.C. -- Feeling the effects of lower margins in gasoline and pharmacy, Ingles Markets, Inc., here said yesterday its third-quarter profits fell 20 percent, while net sales increased 5.4 percent. Its stock share price slid 4.52 percent on the news, closing at $14.56 yesterday on the Nasdaq.
The regional Southeastern retailer said net sales for the quarter ended June 25 were $566.7 million. Comparable store sales grew 5.5 percent for the same period. Excluding the effect of the Easter holiday, which occurred in the March quarter of fiscal 2005 but in the June quarter of fiscal 2004, comps were up 6.2 percent.
For the nine months ended June 25, net sales increased 5.7 percent to $1.68 billion, while comparable store sales grew 5.6 percent. Sales grew in each of the company's departments, with the largest percentage increases in perishables, pharmacy, and gasoline.
"We are pleased with our sales growth and our customer loyalty," said c.e.o. Robert P. Ingle in a statement. "With the planned addition of three stores in the fourth quarter, we remain focused on our customer. We will continue to offer popular, high-quality products in convenient, modern stores."
Ingles' earnings for the quarter, which fell 20 percent, were $6.6 million, compared with $8.3 million in the prior-year period.
The retailer said gross profit, as a percentage of sales, was 25.3 percent for the June 2005 quarter, compared to 26.2 percent for the same quarter last year. It cited the effect of lower overall margins in the pharmacy and gasoline departments.
Net rental income decreased $0.4 million for the quarter and $1.0 million for the 2005 nine-month period due primarily to the sale of a shopping center in September 2004 and the relocation of other tenants from shopping centers to stand-alone sites.
Ingles Markets operates 195 supermarkets and 74 neighborhood shopping centers, all but 17 of which contain an Ingles supermarket.